Children born between September 2002 and January 2011 were given a £250 voucher by the Labour government to invest in a tax-free savings account, with kids from lower-income families receiving £500. This was topped up by a further £250 voucher when the child reached the age of seven.

There were eligibility requirements but, broadly speaking, if parents qualified for child benefit in respect of the child, then the CTF was available. And CTFs had the same tax advantages as ISAs, in that savings are sheltered from Income and Capital Gains Tax.

The scheme essentially encouraged parents to start saving for their kids, so that, by the time they reached 18, they would have a lump sum to help to fund university fees, or living independently.

However, it was not as successful as had been anticipated, and CTFs were scrapped in January 2011, with existing accounts being allowed to continue. Since April 2015, parents have had the option to transfer their child’s CTF into a Junior ISA, which offers a wider investment choice and potentially better returns.

That said, the simple fact is that many eligible parents have no idea their child still holds a CTF. According to the Investing and Saving Alliance (TISA), there were 716,000 accounts left unclaimed in the tax year ending 2022, with £1.1billion sitting untouched in these savings accounts, worth an average of £1,600 each.

If you think your child is a CTF beneficiary but can’t remember the account details, you can search for ‘Find a Child Trust Fund’ on the gov.uk website and complete an online form.

Find out more on this from HMRC 10 things you need to know about Child Trust Funds

If their contact details are up to date, your child will receive a letter from the CTF provider just before their 18th birthday. The problem is that many people have moved house in the past 18 – 20 years and therefore won’t receive their notification. For those who do nothing, the CTF provider will move the money into an Individual Savings Account (ISA), which is also tax-free, or roll it into another account with similar benefits.

If your teenager wants to invest the money somewhere else, there are a number of different options available. Junior ISAs (for people under 18), for example, are worth looking at. They now have much higher savings limits and generally lower costs, as we mentioned earlier.

The over 18s can also access a wider range of saving opportunities, including a Lifetime ISA. These are designed for 18-39-year-olds and attract a government bonus of 25%, or up to £1000 per year.

To find out more about tax-efficient investments, see The best ways to save and invest for young adults

An independent financial adviser can explain more about the options available to youngsters to help you choose what’s best for your circumstances and savings goals.